Accountancy MCQs
Topic Notes: Accountancy
General Description
Plato
- Biography: Ancient Greek philosopher (427–347 BCE), student of Socrates and teacher of Aristotle, founder of the Academy in Athens.
- Important Ideas:
- Theory of Forms
- Philosopher-King
- Ideal State
1
Who is primarily responsible for the development and planning of the audit programme?
Answer:
The audit staff
An audit programme is a detailed plan of the auditing procedures to be performed during an engagement. It is designed by the audit staff or the auditor in charge to ensure that all necessary areas are covered, risks are addressed, and the audit objectives are met efficiently. It serves as a guide for the audit team and a record of the work planned and executed.
2
Which entity is responsible for the preparation of the audit programme?
Answer:
Audit Management
The audit programme is a detailed plan outlining the procedures to be followed during an audit. It is prepared by the audit management or the lead auditor to ensure that all necessary audit objectives are met efficiently. It provides guidance to the audit staff regarding the scope, timing, and direction of the audit work to be performed.
3
For which type of business entity is a continuous audit most appropriate?
Answer:
Big concerns
A continuous audit involves the auditor visiting the client's premises at regular intervals throughout the year. This is particularly useful for large organizations with high transaction volumes, as it allows for early detection of errors and provides a more thorough examination of accounts compared to a final audit.
4
In which type of audit is test checking typically employed?
Answer:
Continuous Audit
Test checking involves examining a representative sample of transactions rather than every single entry. It is most commonly utilized in a continuous audit, where the auditor visits the client's premises at regular intervals throughout the year, allowing for a systematic sampling approach to verify the accuracy of the accounting records.